How to help children up the first steps to financial awareness from consumer
expert Jessica Gorst-Williams.

Financial education is coming to the school curriculum soon in England but aren’t parents even better placed to inculcate a few early lessons in money awareness? Here are a few suggestions of conversations that can help children up the first steps.

WHERE DID THAT PRESENT COME FROM?

When someone sends a present the child will appreciate it all the more if it understands the processes involved.

For a start the money to pay for the gift has probably had to be earned. Even if the giver knitted something they will have paid for the wool unless they unravelled it from an old jumper with wartime-type frugality.

Ways of earning money include of course any amount of forms of employment from collecting rubbish, driving long distance vehicles, serving on the till in a shop, helping people with their health to running the country.

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Tax will usually have been deducted from earnings. This goes towards, for example, interest on the national debt and the NHS. The next step will be for the present giver to choose what to buy, probably by going to a shop or finding something online. The purchase may have another tax included in the price, namely VAT.

Then they will additionally buy wrapping paper and sellotape or perhaps a ribbon. The gift will have to be got from A to B. If it is going by post that could cost another £5.

COUNTING

Counting has lots of advantages not least in being able to calculate what change should be given if paying by cash.

Also for working out your budget.

If there is, say, a six for five offer which may be for chocolate bars, crisps, or cat food packets, the right number of products need to go into the basket to make the most of the deal .

SCHOOL TRIP GIFT SHOP

Often on a school trip a child will be allowed a capped amount of money to spend in a gift shop.

This may be £3. The child doesn’t need to spend it all. They might want a yo-yo that costs £2.20. This leaves 80p to put aside for the proverbial rainy day or towards a must-have comic later.

WHAT THE DICKENS IS THAT?

Mr Micawber from David Copperfield is remembered more for one sage quote about money than for anything else he did in the book. The quote is “Annual income twenty pounds, annual expenditure nineteen (pounds) nineteen (shillings) and six (pence) result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.” This means live within your means if you want to sleep easily at night.

KNOW THAT NOT EVERYONE HAS THE SAME AMOUNT OF MONEY

Not everyone starts with the same advantages or indeed an equal amount of money. Some worthy jobs pay very little. Some not so worthy ones pay a lot more. Some people inherit money, others don’t and so forth. So for some a little sum may count for a lot and they will have had to scrimp and save for it while for others a far larger amount may seem like small change.

Remember that what people spend and how they spend it does not necessarily reflect how much money they have. Some of the richest people have stinging nettles for their supper and their house is falling down around them. Some never return hospitality but go on expensive holidays.

For some pretending to be poor is a ruse. Such considerations need, as far as they can be, to be factored and weighed up discreetly in everyday life.

MONEY CAN GO SO MUCH FURTHER IN SOME PLACES

Nor does money have the same value in different places. In Pakistan £100 may provide schooling for a child for a year. In other countries it might provide a village with a year’s supply of clean water. While here this is what some families would happily spend on one evening meal out or even, in some instances, on a bottle of wine. While it seems buying eight albeit quite flamboyant ice creams in a particular tourist hotspot in Rome could mean there was little change from the same amount.

DIFFERENT COUNTRIES HAVE DIFFERENT CURRENCIES

Once you know your pounds from your pence, go abroad and you will have to learn anew. The numbers on the notes and coins will reflect a different value to what they do at home. As well as being able to identify the notes of the money of the country you are going to you will need to work out what the rate of exchange is so you can compare and find out what the money you hold in your hand is really worth.

ADVERTISEMENTS

Some advertisements are designed to bamboozle people into buying things they might not have thought about acquiring otherwise. The cost of the advertisement ends up in the product purchaser’s shopping basket.

NUMBERS THAT NEED TO BE KEPT SECRET

A credit or debit card along with its details is as valuable as cash, a mobile phone or a precious object. Keep them safe and secret. Pirates and bandits don’t only feature in story books.

WHERE DOES THAT PRODUCT COME FROM

Understanding markets can start with knowing where a product comes from. Green beans from Kenya, lamb from New Zealand. Seeing the New Year in in Damascus over two and a half years ago a tourist may have found all the paraphernalia, whistles, hats and whirligigs for the celebration came from China. Think how that particular market will be decimated now. The implications will be easy enough for older children to understand.